Decision-making and analysis in business, as well as in other fields, has traditionally been conducted in an ad-hoc manner. In the business setting, a decision-maker such as an executive in finance or business development or some other manager gathered facts he deemed material to the decision and employed in-house advisors or referred to outside expert consultants. Alternatives were discussed and weighed, and decisions were made.
Such an approach can be flawed in several ways. Because the approach is not systemized, the decision may be made without a complete and accurate collection of important factual data. In other words, there may not be a “checklist” for ensuring that all of the desired facts are input into the decision-making process. As a result, facts that should be weighed are not, and it is even possible that facts that should not be weighed are. For example, outside expert consultants especially will make assumptions about the goals that the decision-making process seeks to achieve or even about the applicable factual setting. These assumptions, based largely on the outside expert consultant's experience, may not be accurate in all cases. Moreover, the outside expert consultant may be so ingrained with his past experience that he may make these assumptions without even being aware of doing so.
The quality of both in-house advisors and outside expert consultants varies widely. Even the established professional service firms such as large accounting firms, law firms and management consultant firms that have well-deserved reputations for quality and creativity, occasionally rely too heavily on relatively junior and inexperienced people. The lesser known firms include highly-competent professionals along with less-competent individuals. In-house advisors tend to know the company business quite well in comparison to outside expert consultants, and are therefore less prone to factual mistakes, but often are not steeped in the area that is the subject of an important decision; for example, an in-house advisor usually does not analyze sizeable mergers of his company on a day-to-day basis.
The decision-making process and analysis that is traditionally employed does not document the process well. Because the systems tend to be experiential and intuitive, there is little record of why a decision was made or the facts upon which it was based. This is particularly problematic if the decision is later challenged by shareholders or others.
In addition to all the flaws, outside expert consultants are usually quite expensive. It has been estimated that in the United States alone businesses spend over $200 billion annually on consultants, lawyers, accountants and other specialty advisors. As noted above, some of this money may be spent for services that are often misdirected, often not delivered on a sufficiently timely basis, occasionally incompetent, and usually poorly documented.
There have been attempts at developing more systematic and documented routines for decision-making using modern computer techniques and databases. So-called “business intelligence software providers” such as Hyperion Solutions, Microstrategy and Cognos offer software designed to front-end with existing user databases and ERP systems. This software mines information residing elsewhere in the user's organization to provide managers with real-time operational statistics such as amount in inventory and daily sales figures. Such software, however, is not especially designed for the decision-making process, but rather for quick access to rapidly changing information about the user's organization.
Another source of information and decision support services is management education providers and the executive-training centers at many of the college and university business schools. These organizations issue reports, present conferences and provide training to disseminate management “best practices.” This is a highly fragmented industry with a largely ad hoc approach which seldom offers a saleable and scaleable product for systemized decision-making.
Business information providers such as Bloomberg, Gartner Group, Forester and Hoovers provide both synthesized and unsynthesized business information. The expertise of these groups is usually specific to particular industries (such as technology in the cases of Gartner and Forester) or specific to particular kinds of information (such as debt and credit ratings in the case of Standard & Poors. These organizations have a high degree of expertise in their developed fields of information, but do not offer wide ranging products that systemize the decision-making process for general application.
It can be appreciated that there is a need for a system that takes advantage of the sizeable databases available in, and the high processing capability of, modern numeric processing equipment to deliver decision support and implementation. Such a system should ideally produce sound recommendations based on considered analysis utilizing flexible databases containing extensive information. In a preferred embodiment, such a system would be interactive with and tailored to the specific needs and circumstances of each user, and would document for later retrieval the analysis made, the outcome, and the input facts relied upon.
In addition, such a system would ideally take advantage of large private and public networks such as the Internet. The use of the Internet would allow near-universal access and a concurrent presentation platform and user interface, and also allow the system to draw on the vast information content available on world-wide Internet servers. Finally, such a system ideally would take advantage of the expertise and goodwill held by existing professional service and consulting firms.